Insteel Q2 2021 Earnings Report
Key Takeaways
Insteel Industries reported strong second quarter results with net earnings increasing to $14.9 million, or $0.76 per diluted share. Net sales increased 21.0% to $139.0 million, driven by higher average selling prices and increased shipments. Gross margin also widened due to higher spreads between selling prices and raw material costs.
Net earnings increased to $14.9 million, or $0.76 per diluted share, compared to $4.4 million, or $0.23 per share, in the prior year quarter.
Net sales increased 21.0% to $139.0 million from $114.9 million in the prior year quarter.
Average selling prices increased 15.0% and shipments increased 5.2%.
Gross margin widened 840 basis points to 21.7% from 13.3% in the prior year quarter.
Insteel
Insteel
Forward Guidance
The company expects solid performance in the second half of the fiscal year due to favorable trends in non-residential construction markets and the usual seasonal upturn in demand. However, they anticipate tight supply conditions and escalating prices for steel wire rod.
Positive Outlook
- Favorable trends in non-residential construction markets.
- Usual seasonal upturn in demand.
- Recent private non-residential construction leading indicators are signaling a rebound in activity close to pre-pandemic levels.
- Public construction activity has remained resilient.
- Favorable determinations in trade cases against sixteen countries.
Challenges Ahead
- Extremely tight supply conditions in both domestic and international markets for steel wire rod.
- Escalating prices in both domestic and international markets for steel wire rod.
- Delivery performance by suppliers may be unpredictable.
- Potential scheduling and operational inefficiencies.
- Gross margin should normalize once raw material markets stabilize.